Ambit Capital has updated its model portfolio, adding Axis Bank, Larsen & Toubro, UltraTech Cement, and Ather Energy while exiting Coal India, Shriram Finance, HDFC Life, and Tata Motors' commercial vehicle unit. The firm remains cautious on the broader market for the rest of 2026, favoring large-cap stocks to navigate potential volatility and foreign fund outflows.
What Happened
Ambit Capital has announced a strategic rebalancing of its model portfolio for June 2026. The firm has added four major companies—Axis Bank, Larsen & Toubro (L&T), UltraTech Cement, and Ather Energy—to its list of preferred stocks. Simultaneously, it has removed Coal India, Shriram Finance, HDFC Life Insurance, and Tata Motors' commercial vehicle division. This move highlights the brokerage's shift toward large-cap, stable companies as it prepares for a period of market uncertainty.
Rationale Behind the Changes
The brokerage's updated portfolio reflects a focus on specific sector trends rather than broad market betting. For banking, Ambit is favoring traditional banks over non-banking financial companies (NBFCs). It noted that banks with a higher share of loans linked to the Electronic Bank Lending Rate (EBLR), such as Axis Bank, are better positioned to manage interest rate changes.
In the auto sector, the inclusion of Ather Energy shows a bet on the long-term growth of the electric vehicle market, even as the broader auto industry faces problems like high inflation and weak rural demand. UltraTech Cement was added as a tactical move, anticipating that a drop in energy and fuel prices could help the cement company improve its profit margins. L&T was chosen for its status as a large-cap heavy hitter, which the firm believes offers safety in a market where leadership is narrowing to a few top companies.
Why Some Stocks Were Removed
The decision to exit stocks like Coal India, Shriram Finance, and HDFC Life reflects the firm's cautious stance. By reducing exposure to these sectors, the brokerage is signaling that it prefers large-cap, liquid stocks that can provide a cushion during volatile times. The move away from specific auto and finance names suggests a shift in how the firm expects these industries to perform in the current economic environment.
Market Outlook and Performance
Ambit Capital has expressed a cautious view for the rest of 2026. It cited several global and domestic factors, including geopolitical tensions, uncertainty regarding the future of Artificial Intelligence, and ongoing selling by foreign investors, as reasons for the potential slowdown. The firm stated that it does not expect significant gains from current levels in the near term.
It also shared an honest update on its own performance, noting that its model portfolio has lagged behind the NSE500 benchmark by 5% since mid-March 2026. This was largely due to underperformance in the IT sector. Despite this, the firm remains focused on defensive sectors such as healthcare, telecom, and consumer goods, hoping for a recovery later in the year.
What Investors Should Track
Investors should pay attention to how brokerage firms adjust their portfolios, as these moves often highlight broader sector trends. The key monitorable for the coming months will be whether the anticipated large-cap defensive strategy helps the portfolio recover against benchmark indices. Additionally, watch for any shifts in foreign investor sentiment and interest rate trends, as these remain the biggest risks to the market's stability in 2026.